India’s apparel exports are estimated to de-grow by 4-5% in FY2019, following a similar de-growth of 4% in FY 2018 and modest growth rates of 1% and 3% in FY2016 and FY2017 respectively, according to a latest report by ICRA.
“The decline in India’s apparel exports in FY2019 so far has been primarily driven by a sharp inexplicable decline witnessed in shipments to the United Arab Emirates (UAE) from July 2017 onwards. Yet, the trend otherwise also has not been encouraging. If the trade with UAE is excluded, India’s apparel exports stood flat (vis-à-vis a 7% decline in India’s overall apparel exports) in 10 months FY2019. As this weakness coincides with a time when the global apparel trade has shown signs of positive momentum, it remains a cause of concern.” – Jayanta Roy, Senior Vice-President and Group Head, ICRA
“While China – the world’s largest apparel manufacturer and exporter, continues to shed market share in the global trade, India has not been able to capitalise on the opportunity. Instead, a large chunk has been garnered by Bangladesh and Vietnam, the second and the third largest apparel exporting nations globally. While Bangladesh has been the key beneficiary in the EU, Vietnam has maintained growth in its stronghold market of the US,” adds Roy.
In this scenario, steps taken by the Indian government to cope with the challenges play a crucial part. Also, given the ongoing trade war between the US and China, it remains to be seen how countries like India, Bangladesh and Vietnam, reap benefit of the situation.
